Guzman's theory assumes, that states conduct a cost-benefit analysis and decide on this basis, whether to comply with an international legal obligation or not. As the case of the ILO Convention presents an "infinitely repeated game" in the sense, that it establishes long-term commitments between - especially in the area of trade - frequently interacting states, Bangladesh should consider possible direct sanctions and reputational consequences of non-compliance. Bangladesh's cost-benefit analysis obviously came to the conclusion, that the costs of not complying with central parts of the ratified Convention C087 do not exceed the benefits of doing so. In order to analyse the explanatory power of Guzman's approach, these costs and benefits have to be determined and the possible existence of reputational consequences and direct sanctions in this case have to be analysed.
The domestic costs of not adequately safeguarding the worker's rights to form unions and demonstrate for their rights are the danger of social upheavals and an increasingly frustrated working force. The widespread poverty in the country, however, debilitates the bargaining power of the workers, as the loss of the employment would have devastating consequences for the workers and their families. Also incidences like imprisonments or murders of union activists and violent police actions intimidate workers and deter them from large scale protests. Therefore, the domestic costs of a non-complying are rather low.
The international costs of non-compliance with the Convention contain reputational damages and possible trade sanctions by the country's main trade partners. As previously mentioned, among the top importers of Bangladesh's export products are the United States, Germany, the United Kingdom and other European countries. All of these countries are also ILO members and except for the United States, that did not ratify the Convention C087, all
208 Dunn, Karen, Mondal, Abdul Hye (2011): Report on the Review of the Decent Work Country Programme Bangladesh 2006-2009; p.5
209 ibid.
210 International Labour Organization (2010): Normlex, Case No. 2765 (Bangladesh), Bangladesh Cha-Sramik Union (BCSU);
available at: http://www.ilo.org/dyn/normlex/en/f?p=1000:50001:0::NO:50001:P50001_COMPLAINT_FILE_ID:2897966 (last access: 05/01/13)
of them show high compliance levels with the Convention C087. They are highly stable parliamentary democracies, that set a high value on human rights, social justice and decent working conditions. Especially in recent years, there was also an increased public awareness in these countries of Bangladesh's poor working conditions and the repression of union's in the country. A review of the news coverage on the topic for example in Germany shows, that clothing manufacturers such as H&M, Adidas or C&A, were denunciated for producing there and therefore profiting from the exploitative working conditions in the country.211 This led to exerted incentives of the concerned companies to polish up their reputation by establishing codes of conduct and providing more transparency about their supplying factories. H&M, for example, explicitly refers to the ILO's fundamental Contentions in its code of conduct and published its global supply chain in an annual sustainability report.212 This public outrage about Bangladesh's labour policy and Western companies, that profit from these inhuman conditions, however, did not affect the bilateral economic and political relations between Bangladesh and its Western trading partners.
Although politicians and diplomats of Bangladesh's main trading partners did express their concern about working conditions in Bangladesh213, the governments did not take measures to limit imports from Bangladesh, nor did they prompt their companies to suspend production in the country until national laws on workers' rights are improved.
Bangladesh's exports to the United States and the European Union constantly increased during the last years.214 Regarding the United States, US imports from Bangladesh rose by 13,2% from 2010 to 2011.215 Also foreign direct investment in Bangladesh increased with an impressive rate of 25 % from 910 Million US Dollar in 2010 to 1,13 Billion US Dollar in 2011, especially due to new investments in the garment sector.216
Next to a lack of significant reputational consequences, Bangladesh does not have to fear any direct sanctions. Due to its low development status, Bangladesh does not face any trade restrictions from the European Union. The European Union's Everything But Arms
211 See for example: Financial Times Deutschland (25/11/12): Feuer in Bangladesh - C&A ließ in abgebrannter Textilfabrik produzieren; available at: http://www.ftd.de/politik/international/:feuer-in-bangladesch-c-a-liess-in-abgebrannter-textilfabrik-produzieren/70121953.html (last access: 06/01/13); Focus Online (24/10/12): Ausbeutung in Kambodscha – Vorwürfe gegen H&M: 14,50 Euro für 70 Stunden Arbeit; available at: http://www.focus.de/finanzen/news/unternehmen/ausbeutung-in-kambodscha-vorwuerfe-gegen-hundm-14-50-euro-fuer-70-stunden-arbeit_aid_845748.html (last access: 06/01/13)
212 H&M (n.d.): Code of Conduct; available at: http://about.hm.com/content/hm/AboutSection/en/About/Sustainability/
Commitments/Responsible-Partners/Code-of-Conduct.html (last access: 06/01/13)
213 See for example: The Daily Star (07/06/12): Mozena fears 'perfect storm' in garment sector; available at:
http://www.thedailystar.net/newDesign/news-details.php?nid=237309 (last access: 06/01/13)
214 European Commission (2012): EU Bilateral Trade and Trade with the World, Bangladesh – Trade Statistics;
215 Office of the United States Trade Representative (n.d.): Bangladesh; available at: http://www.ustr.gov/countries-regions/south-central-asia/bangladesh (last access: 06/01/13)
216 Chowdhury, Abdur R. (10/07/12): Connecting the Dots – FDI in Bangladesh, The Daily Star (online); availabe at:
http://www.thedailystar.net/newDesign/news-details.php?nid=241435 (last access: 06/01/13)
(EBA) Agreement provides "quota-free access to the EU market".217 Regarding the United States, Bangladesh is part of the Generalized System of Preferences (GSP) Program, which invites US investors to produce in Bangladesh and guarantees Bangladesh a duty-free import of selected goods into the United States.218 Summarizing, it gets obvious, that Bangladesh's violation of its obligation under ILO Convention C087 did not result in any quantifiable reputational losses or direct political or economic sanctions.
The benefits of non-compliance, on the other hand, are mainly of financial nature.
Bangladesh's economic progress in the last decades was significantly based on the success of its export-oriented textile industry. With a great amount of workers, that are willing to work for an extremely low wage, Bangladesh was able to attract many foreign companies with its unprecedentedly low production costs. The country's eight EPZs, which were established in the 1980s, offer further amenities for foreign investors. In these free trade zones, imports of raw materials are duty free and export goods are not liable to tax.219 If production costs in Bangladesh went up, it would have to be expected, that many foreign investors would leave the country and many of the Western companies, that are currently producing their clothes in Bangladesh, would look for supplying factories in other countries, such as Cambodia or Pakistan, which presents a serious threat to Bangladesh's economy.
If workers were able to freely associate and form unions without interference, they would be able to organise their interests and be able to formulate concrete demands, such as higher wages, reasonable working hours or higher security standards in their workplaces. If peaceful demonstrations and strikes were possible, those demands could not be ignored in the long run and at least slow improvements of working conditions would be likely to occur.
This, in turn, would lead to increased production costs and therefore less attractive investment and production conditions in Bangladesh. Thus, the government of Bangladesh has high benefits from its non-compliance with Convention C087.
Taken together, the analysed costs and benefits of non-complying with the Convention are able to explain Bangladesh's low compliance status. As the analysis is mainly based on economic indicators, however, Guzman's theory does not include certain factors, such as the difficulties, that root in the low development status of Bangladesh. Therefore, it is also not able to cover all possibly relevant aspects. Summarizing, the conclusion can be drawn, that while Guzman's theory has difficulties to capture reasons of non-compliance, that are beyond the country's direct sphere of influence, the managerial approach has shortcomings
217 Bhattacharya, Debapriya, Rahman, Mustafizur, Raihan, Ananya (2004): The EU-EBA Inititative: Market Access Implications and Potential Benefits for Bangladesh; Centre for Policy Dialogue, Occasional Paper No.43, p.5
218 United States Department of State (2012): U.S. Relations with Bangladesh; available at:
http://www.state.gov/r/pa/ei/bgn/3452.htm (last access: 07/01/13)
219 Dowla, Asif (1997): Export Processing Zones in Bangladesh: The Economic Impact; Asian Survey Vol. 37 No. 6, p.561
in that it does not take into consideration conscious decisions of non-compliance of states, for example due to economic benefits.
5 Conclusion
The presented case of the ILO and its Core Labour Standards in this bachelor thesis illustrated, that although being of essential importance - especially in the area of human rights - international law still faces severe difficulties regarding states' behaviour towards it.
Despite the facts, that there is an impressively high numbers of ratifications of the CLS and the ILO's supervisory system is widely regarded as being exceptionally versatile, violations of the Conventions are still prevalent in many countries. In order to enhance legal compliance with the ILO's fundamental Conventions, it is of essential importance to conduct research on the motives behind states' behaviour towards these norms. Here, the numerous existing theories on the topic offer a variety of different approaches. By applying two of the most prominent contemporary compliance theories, this bachelor thesis gave first insights into the motives, that might be relevant to an ILO member state in its decision whether to comply with ratified ILO Conventions or not. Nevertheless, it is obvious, that one case study can never grasp all relevant aspects. Therefore, the examination of further case studies and the application of other theories to the case of the ILO would certainly prove useful in order to fully comprehend states' compliance decisions. In a subsequent step, it might additionally be possible to use this knowledge about states' motives regarding compliance for improving the supervisory and enforcement mechanisms of the CLS.
With respect to the presented case study, the managerial theory of Chayes and Chayes illustrated, that low developed countries such as Bangladesh certainly face higher obstacles to comply with international treaties like the ILO Convention C087, than well developed countries. In an unconsolidated institutional setting with problems such as corruption, misallocations of fiscal resources and a low general education level, significant changes of national legislation and fundamental reforms of the administrative structure are surely much harder to accomplish than in a highly stable democracy. On the other hand, however, the government's refusal to fundamentally revise its labour policy also indicated a lack of political will. Guzman's reputational theory then revealed the economic benefits of non- compliance. This leads to the conclusion, that a better regulation for the implementation of trade sanctions might prove useful. In general, there are two ways, through which trade sanctions could be realized in cases of non-compliance: Bilateral trade agreements could entail provisions, that impose automatic trade sanctions, whenever severe violations of ratified labour rights Conventions occur. Here, however, the implementation of trade sanctions strongly hinges on the bilateral interests between the two concerned countries.
While in the case of Myanmar, state imposed forced labour led to the imposition of trade
sanctions by the United States and the European Union220, the presented case study showed, that the option of trade sanctions was not considered by Bangladesh's main trading partners - despite a broad public awareness of Bangladesh's violations of ratified ILO Conventions. Thus, this approach would not necessarily lead to overall improvements and is therefore insufficient. The second way would be the inclusion of the ILO's fundamental Conventions into the body of rules of the World Trade Organization. This approach is much more promising. So far, however, this intensely debated proposal floundered on the resistance of developing countries, that argue, that this measure is based on protectionist considerations of industrialized countries and would impede development.
Many empirical studies, however, indicated, that long-term development indicators and the level of compliance with the CLS in a country are positively related.221 A "social clause" in the World Trade Organization would entail the benefit, that developing countries would be freed of the risk, that an improvement of the CLS in the country leads to comparative disadvantages in the sense, that the country becomes less appealing for foreign investors, who then simply have the opportunity to move on to cheaper countries. If the CLS were part of the World Trade Organization's set of rules, all 157 member states would automatically be affected and thus, the possibilities for foreign investors to find cheaper alternatives would be significantly reduced. Therefore, further attempts to convince the opponents of this proposal of its benefits should be conducted in order to enhance the probability, that one day, global compliance with these truly fundamental Conventions might be achieved.
220 Chow-Ewing, Michael (2007): First Do No Harm: Myanmar Trade Sanctions and Human Rights; Northwestern Journal of International Human Rights, Vol. 5, Issue 2; pp.156, 159
221 See for example: Bazillier, Rémi (2007): Core Labour Standards and Development: Impact on long-term income; available at: http://remi.bazillier.free.fr/FULLVERSION_clsdev_Worlddev_07.pdf (last access: 06/01/13)
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